,i  #aacth ,,congress  #ast ,session    
,h4 ,r4 #aeee  ,,in ,,the ,,house ,,of  
,,representatives  ,april #ae1 #bjac    
,mr4 ,doggett 7for himself1 ,ms4 ,bass1 
,mr4 ,becerra1 ,ms4 ,chu1 ,mr4          
,cicilline1 ,mr4 ,conyers1 ,mr4         
,de,fazio1 ,ms4 ,de,gette1 ,ms4         
,de,lauro1 ,mr4 ,dingell1 ,mr4 ,ellison1
 ,mr4 ,johnson of ,georgia1 ,ms4 ,lee of
 ,california1 ,mr4 ,mc,dermott1 ,mr4    
,mc,govern1 ,mr4 ,moran1 ,mr4 ,rush1    
,mr4 ,sherman1 ,mr4 ,tonko1 ,ms4        
,tsongas1 ,mr4 ,garamendi1 ,ms4         
,schakowsky1 ,mr4 ,payne1 and ,mr4      
,cohen7 introduced the following bill2  
which was referred to the ,committee on 
,ways and ,means  ,a ,,bill  ,to amend  
the ,internal ,revenue ,code of #aihf to
 reduce international tax avoidance and 
restore a level playing field for       
,american businesses4  #a4 ,short title 
,this ,act may be cited as the          
,international ,tax ,competitiveness    
,act of #bjac4  #b4 ,treatment of       
foreign corporations managed and        

controlled in the ,united ,states as    
domestic corporations  7a7 ,in general  
,section #ggja of the ,internal ,revenue
 ,code of #aihf 7relating to            
definitions7 is amended by redesignating
 subsection 7p7 as subsection 7q7 and by
 inserting after subsection 7o7 the     
following new subsection3  7p7 ,certain 
corporations managed and controlled in  
the ,united ,states treated as domestic 
for income tax  7#a7 ,in general        
,notwithstanding subsection 7a77#d71 in 
the case of a corporation described in  
paragraph 7#b7 if--  7,a7 the           
corporation would not otherwise be      
treated as a domestic corporation for   
purposes of this title1 but  7,b7 the   
management and control of the           
corporation occurs1 directly or         
indirectly1 primarily within the ,united
 ,states1  then1 solely for purposes of 
chapter #a 7and any other provision of  
this title relating to chapter #a71 the 
corporation shall be treated as a       
domestic corporation4  7#b7 ,corporation

 described  7,a7 ,in general ,a         
corporation is described in this        
paragraph if--  7i7 the stock of such   
corporation is regularly traded on an   
established securities market1 or  7ii7 
the aggregate gross assets of such      
corporation 7or any predecessor         
thereof71 including assets under        
management for investors1 whether held  
directly or indirectly1 at any time     
during the taxable year or any preceding
 taxable year is #ej1jjj1jjj or more4   
7,b7 ,general exception ,a corporation  
shall not be treated as described in    
this paragraph if--  7i7 such           
corporation was treated as a corporation
 described in this paragraph in a       
preceding taxable year1  7ii7 such      
corporation--  7,i7 is not regularly    
traded on an established securities     
market1 and  7,,ii7 has1 and is         
reasonably expected to continue to have1
 aggregate gross assets 7including      
assets under management for investors1  
whether held directly or indirectly7 of 

less than #ej1jjj1jjj1 and  7iii7 the   
,secretary grants a waiver to such      
corporation under this subparagraph4    
7,c7 ,exception from gross assets test  
,subparagraph 7,a77ii7 shall not apply  
to a corporation which is a controlled  
foreign corporation 7as defined in      
section #ieg7 and which is a member of  
an affiliated group 7as defined section 
#aejd1 but determined without regard to 
section #aejd7;b77#c77 the common parent
 of which--  7i7 is a domestic          
corporation 7determined without regard  
to this subsection71 and  7ii7 has      
substantial assets 7other than cash and 
cash equivalents and other than stock of
 foreign subsidiaries7 held for use in  
the active conduct of a trade or        
business in the ,united ,states4  7#c7  
,management and control  7,a7 ,in       
general ,the ,secretary shall prescribe 
regulations for purposes of determining 
cases in which the management and       
control of a corporation is to be       
treated as occurring primarily within   

the ,united ,states4  7,b7 ,executive   
officers and senior management ,such    
regulations shall provide that--  7i7   
the management and control of a         
corporation shall be treated as         
occurring primarily within the ,united  
,states if substantially all of the     
executive officers and senior management
 of the corporation who exercise        
day-to-day responsibility for making    
decisions involving strategic1          
financial1 and operational policies of  
the corporation are located primarily   
within the ,united ,states1 and  7ii7   
individuals who are not executive       
officers and senior management of the   
corporation 7including individuals who  
are officers or employees of other      
corporations in the same chain of       
corporations as the corporation7 shall  
be treated as executive officers and    
senior management if such individuals   
exercise the day-to-day responsibilities
 of the corporation described in clause 
7i74  7,c7 ,corporations primarily      

holding investment assets ,such         
regulations shall also provide that the 
management and control of a corporation 
shall be treated as occurring primarily 
within the ,united ,states if--  7i7 the
 assets of such corporation 7directly or
 indirectly7 consist primarily of as    
sets being managed on behalf of         
investors1 and  7ii7 decisions about how
 to invest the assets are made in the   
,united ,states4  4  7b7 ,effective date
 ,the amendments made by this section   
shall apply to taxable years beginning  
on or after the date which is #b years  
after the date of the enactment of this 
,act4  #c4 ,current taxation of         
royalties and other income from         
intangibles received from a controlled  
foreign corporation  7a7 ,repeal of     
look-,thru rule for royalties received  
from controlled foreign corporations    
,paragraph 7#f7 of section #ied7;c7 of  
the ,internal ,revenue ,code of #aihf is
 amended--  7#a7 by striking rents1 and 
royalties in subparagraph 7,a7 and      

inserting and rents1 and  7#b7 by       
striking 1 rent1 or royalty both places 
it appears in subparagraph 7,b7 and     
inserting or rent4  7b7 ,entities not   
permitted ,to be disregarded in         
determining royalties ,subsection 7c7 of
 section #ied of such ,code is amended  
by adding at the end the following new  
paragraph3  7#g7 ,all royalties taken   
into account ,for purposes of           
determining the foreign personal holding
 company income which consists of       
royalties1 this subsection shall be     
applied without regard to any election  
to disregard any entity which would be  
taken into account for ,federal income  
tax purposes but for such election4  4  
7c7 ,certain other income derived from  
,united ,states intangibles taken into  
account as subpart ,f income ,subsection
 7d7 of section #ied of such ,code is   
amended by adding at the end the        
following new paragraph3  7#e7 ,special 
rule for certain products produced      
pursuant to intangibles made available  

by ,united ,states persons ,for purposes
 of this subsection1 personal property  
shall be treated as having been         
purchased from a related person if any  
intangible property 7within the meaning 
of section #icf7;h77#c77;,b77 made      
available to a controlled foreign       
corporation1 directly or indirectly1 by 
a related person which is a ,united     
,states person contributes1 directly or 
indirectly1 to the production of such   
personal property by the controlled     
foreign corporation4 ,the preceding     
sentence shall not apply to any personal
 property produced directly by the      
controlled foreign corporation1 without 
regard to any election to disregard any 
entity which would be taken into account
 for ,federal income tax purposes but   
for such election4  4  7d7 ,effective   
date ,the amendments made by this       
section shall apply to taxable years of 
foreign corporations beginning after    
,december #ca1 #bjac1 and to taxable    
years of ,united ,states shareholders   

within which or with which such tax     
years of such foreign corporations end4 
#d4 ,taxation of boot received in       
reorganizations  7a7 ,in general        
,paragraph 7#b7 of section #cef7;a7 of  
the ,internal ,revenue ,code of #aihf is
 amended--  7#a7 by striking ,if an     
exchange and inserting  ,except as      
otherwise provided by the ,secretary--  
7,a7 ,in general ,if an exchange  2     
7#b7 by striking then there shall be and
 all that follows through ,february #bh1
 #aiac and inserting then the amount of 
other property or money shall be treated
 as a dividend to the extent of the     
earnings and profits of the corporation2
 and  7#c7 by adding at the end the     
following new subparagraph3  7,b7       
,certain reorganizations ,in the case of
 a reorganization described in section  
#cfh7;a77#a77;,d7 with respect to which 
the requirements of subparagraphs 7,a7  
and 7,b7 of section #ced7;b77#a7 are met
 7or any other reorganization specified 
by the ,secretary71 in applying         

subparagraph 7,a7--  7i7 the earnings   
and profits of each corporation which is
 a party to the reorganization shall be 
taken into account1 and  7ii7 the amount
 which is a dividend 7and source        
thereof7 shall be determined under rules
 similar to the rules of paragraphs 7#b7
 and 7#e7 of section #cjd7;b74  4  7b7  
,earnings and profits ,paragraph 7#g7 of
 section #cab7n7 of such ,code is       
amended by adding at the end the        
following3 ,a similar rule shall apply  
to an exchange to which section         
#cef7;a77#a7 applies44  7c7 ,conforming 
amendment ,paragraph 7#a7 of section    
#cef7;a7 of such ,code is amended by    
striking then the gain and inserting    
then 7except as provided in paragraph   
7#b77 the gain4  7d7 ,effective date    
,the amendments made by this section    
shall apply to exchanges after the date 
of the enactment of this ,act4